Four manufacturing organisations have petitioned the Ghana International Trade Commission (GITC) over unfair trade practices by foreign companies which enjoy subsidies and export rebates in their home countries and flood the Ghanaian market with cheap products.
Aluworks, Association of Biscuit Manufacturers, Cement Manufacturers Association of Ghana and the Steel Manufacturers Association of Ghana say it is time to apply WTO rules and impose equivalent additional duties to match the level of any export rebate granted these foreign companies.
According to Kwasi Okoh, Managing Director of Aluworks, his company has been making losses since 2009 – mainly due to the unbridled import of sub-standard and cheap aluminum sheets and others.
“We have to apply the World Trade Organisation rules, and we have to impose equivalent additional duties to match the level of any export rebate granted.
“We have waited for this for 10 years; we want it now, by end of 2019 and no later. Aluworks is on the verge of extinction,” he said during a presentation of the company’s petition to members of GITC in Accra.
He explained that work of the erstwhile Tariff Advisory Board practically proved the allegation of dumping, but it has to be re-confirmed. However, getting statistics from China has been difficult.
Mr. Okoh said the GITC should use diplomatic contacts to derive required figures, re-prices in China, and official levels of all export rebates on aluminum.
There is also duty benchmarking, with the company arguing that the recently revised import duty benchmarking has deepened the export rebate effect.
“Now aluminium is officially landed at even below cost of the primary metal, which should be impossible but it is in practice – giving the Chinese traders a field-day,” he added.
The Cement Manufacturers Association of Ghana (CMAG), which was represented by its Executive secretary, Rev. Dr. George Dawson-Ahmoah, argued that there was need to institute measures that safeguard the local cement industry.
“Do we need to import cement? Given that the association has the capacity to meet demand when there is a fair playing field,” he said.
The Steel Manufacturers Association also argued that they have about 1 million metric tonnes in capacity and about 350,000 metric tonnes of average demand, resulting in a surplus of about 650,000 metric tonnes.
They contend that the importation of iron rods and steel coils with its attendant unfair trade practices is “killing the local steel industry”, and reckon Act 926 of the GITC Act has the solution.
The Association of Biscuit Manufacturers, represented by Adel Shami, indicated that their group employs more than 2,000 workers with a production capacity of more than 6,500 metric tonnes per month.
Currently, their production is around 2,600 metric tonnes per month and collectively operate at 40 percent capacity.
Some of the group’s challenges include: unrealistic low values for imported biscuits – they explain that the cost of 1kg of biscuit should not be less than US$1.5. However, Customs is accepting values as low as US$0.45/kg.
Also, they contend that environment tax on plastic wrappers is a bigger stumbling block to the growth of business.
“We pay 10 percent tax when importing the wrappers; importers use same material but do not pay any tax. Wrappers represent 30 percent of the cost for finished biscuits,” Adel Shami said.
Executive Secretary of GITC, Frank Agyekum, said they intend to work on the petitions within a nine-month period, and that “whatever they do is in conversant of international regulation, all these things are being done under WTO regulations”.
He added that they will invite all sides to give an input to the petitions brought before them.
Minister for Trade and Industry, Alan Kyeremanten, encouraged the private sector to avail itself of the Commission’s work, and also underscored the importance of their work.
“The objective for establishment of the Ghana International Trade Commission is not to stifle trade or competition with the outside world, but to ensure that Ghanaian companies have a fighting chance to survive for the good and well-being of society.
“Neither is it meant to prevent high quality goods produced outside the country from entering our market.”
Furthermore, he noted that the WTO regulations provide that importing countries can take retaliatory measures by way of, among others, imposing tariffs or curtailing the importation of goods that have been specifically subsidised in their countries of origin.
The GITC was established as an agency responsible for ensuring compliance with the rules and regulations of international trade, regulate Ghana’s international trade in conformity with the rules and regulations of the world trade system, and deal with related matters.
As part of its duties, the Commission is to ensure special import safeguard measures such as anti-dumping duties and tariff adjustments.
It is also required, under the law, to monitor and advise the Minister of Trade and Industry on Ghana’s compliance with its bilateral and multilateral treaty obligations in the area of international trade; conduct studies and publish reports on the competitiveness of Ghana’s tariff structure and impact of the tariff structure on domestic industry; and market access opportunities and challenges in relation to exports from Ghana.
The GITC is expected to ensure fairness, efficiency, transparency and objectivity in the application of measures affecting international trade and the use of World Trade Organisation measures.